It results in lower short run average cost in economies of sale .
<h3>Economies of scale</h3>
Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. This is the idea behind “warehouse stores” like Costco or Walmart. In everyday language: a larger factory can produce at a lower average cost than a smaller factory. Figure 2 illustrates the idea of economies of scale, showing the average cost of producing an alarm clock falling as the quantity of output rises. For a small-sized factory like S, with an output level of 1,000, the average cost of production is $12 per alarm clock. For a medium-sized factory like M, with an output level of 2,000, the average cost of production falls to $8 per alarm clock. For a large factory like L, with an output of 5,000, the average cost of production declines still further to $4 per alarm clock.
One prominent example of economies of scale occurs in the chemical industry. Chemical plants have a lot of pipes. The cost of the materials for producing a pipe is related to the circumference of the pipe and its length. However, the volume of chemicals that can flow through a pipe is determined by the cross-section area of the pipe.
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Answer:
The profit when the company makes five widgets is $30
To maximize profit, the company should produce 6 widgets per day
The company's profit would decrease by $17 if the company made seven widgets
Explanation:
i took the quiz.
Answer:
No entry is made
Explanation:
When a company applies the partial equity method in accounting for its investment in a subsidiary and initial value, book values, and fair values of net assets acquired are all equal, there would be no entry in the consolidation worksheet. The reason is the initial investment in the subsidiary, the initial value, book values and fair values of net assets acquired are all equal, no changes has been made.
Had to look for the options and here is my answer. If a monopolistic competitor ables to restrict output, then the reason why it does not earn economic profits is because the products of the firm are all identical or the same. Hope this answers your question.
A 30 percent reduction in product and service variety will affect the efficiency of a supply chain. In this question, the given statement is false.
If we reduce the 30 percent in the variety of product and service will affect the efficiency of a supply chain. Reducing variety in products and services is prominent means of increasing the efficiency of the supply chain.
As given in the question that if there is some percentage of reduction in product and services variety then it will not affect the supply chain efficiency. This is false. Because reducing the variety ultimately increase the efficiency of the supply chain and its related processes.
Variety Reduction:
When you reduce the different available number of solutions to meet the same need is referred as variety reduction. In the supply chain, when reducing the different products and services that fulfill the same need will affect the efficiency of the supply chain.
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